You Think Gold’s been doing Bad, Check out Gold Miners…
What’s the only thing worse than being long gold as it plunged 12% since June 1st? Being long a gold mining company who has massive exposure to the plunging gold price, as well as some added extra exposure in terms of the company’s management, fixed costs, debt, and so on… Just look at the performance of these commodity producer/miner ETFs versus the commodity ETFs versus the actual commodity itself.
It’s Getting Volatile in Here…
Dull is the last word to use to describe recent events. Vix is at its highest point this year, and the ATR’s of Gold, and the S&P 500 are showing major movements. Could we be seeing the start of a volatility level like in 2007 and 2008? Is this the moment for manged futures to shine once more?
Stock’s Safety Net Disappearing?
Don’t look now, bond investors, but there may be a bit of a sea change happening in how bonds react to falling stock prices (or perhaps, more correctly – how stocks react to falling bond prices). The last five weeks are showing the opposite of the rule, and if that continues, havoc could commence. We plotted out the correlation between the S&P 500 and 30 Year Cash Bonds over the past two years:
Random Thoughts on a Gold Down -$100 Day
Stocks down AND Bonds down (sign of things to come in a rising rate environment?)
Gold down -$100(-6.83%). , broke April lows, now at late 2010 levels
Silver down almost -10%, now lost over 60% since 2011
Big “Risk Off” Day in the Markets…
Markets are down big across the board on the heels of comments from Fed Chairman Ben Bernanke that the Federal Reserve may start pairing quantitative easing later this year. Stock index futures are down just over 1.50% this morning but the brunt of the losses are being seen in commodities. See how bad it got.
Disclaimers
Managed futures, commodity trading, forex trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. You should not rely on any of the information as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments.
The entries on this blog are intended to further subscribers understanding, education, and – at times – enjoyment of the world of alternative investments. Unless distinctly noted otherwise, the data and graphs included herein are intended to be mere examples and exhibits of the topic discussed, are for educational and illustrative purposes only, and do not represent trading in actual accounts. Opinions expressed are that of the author.
The mention of specific asset class performance (i.e. +3.2%, -4.6%) is based on the noted source index (i.e. Newedge CTA Index, S&P 500 Index, etc.), and investors should take care to understand that any index performance is for the constituents of that index only, and does not represent the entire universe of possible investments within that asset class. And further, that there can be limitations and biases to indices such as survivorship, self reporting, and instant history.
The performance data for various Commodity Trading Advisor (“CTA”) and Commodity Pools are compiled from various sources, including Barclay Hedge, RCM’s own estimates of performance based on account managed by advisors on its books, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor’s disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor’s track record.
The mention of general asset class performance (i.e. managed futures did well, stocks were down, bonds were up) is based on RCM’s direct experience in those asset classes, estimates of performance of dozens of CTAs followed by RCM, and averaging of various indices designed to track said asset classes.
The mention of market based performance (i.e. Corn was up 5% today) reflects all available information as of the time and date of the publication.
The owner of this blog, RCM Alternatives, may receive various forms of compensation from certain investment managers highlighted and/or mentioned within the blog, including but not limited to retaining: a portion of trade commissions, a portion of the fees charged to investors by the investment managers, a portion of the fees for operating a fund for the investment managers via affiliate Attain Portfolio Advisors, or via direct payment for marketing services.
Managed Futures Disclaimer:
Past Performance is Not Necessarily Indicative of Future Results. The regulations of the CFTC require that prospective clients of a managed futures program (CTA) receive a disclosure document when they are solicited to enter into an agreement whereby the CTA will direct or guide the client’s commodity interest trading and that certain risk factors be highlighted. The disclosure document contains a complete description of the principal risk factors and each fee to be charged to your account by the CTA.
See the full terms of use and risk disclaimer here.
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